Last week we discussed the first Federal Circuit case added to the Supreme Court’s docket this Term, and we wondered when we’d have the opportunity to discuss whatever cases might be next in the pipeline. Lucky for us, that opportunity came a little sooner than expected. We got a precedential order with a concurring opinion teeing up the latest Section 101 challenge for the Supreme Court to consider (or not). Below we provide our usual weekly statistics and our case (or in this instance, order) of the week.
Precedential opinions: 2
Non-precedential opinions: 3
Rule 36: 4
Longest pending case from argument: Monk v. Wilkie, No. 19-1094 (323 days)
Shortest pending case from argument (non-Rule 36): Finjan, Inc. v. Juniper Networks, Inc., No. 19-1837 (13 days)
Case of the week: American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, No. 18-1763 (precedential order denying motion to stay the mandate)
Panel: Judges Dyk, Moore, and Taranto, with Judge Dyk authoring the order and Judge Moore filing a concurring opinion
You should read this case if: you’re trying to stay a mandate or you’re following American Axle
This week is about some process and a little substance. First, process: we all know about American Axle (which we discussed here), where the Federal Circuit sharply divided in denying rehearing en banc and which may present the Supreme Court with an opportunity to address Section 101 challenges outside the software and diagnostic context. In Friday’s precedential order, the Federal Circuit denied patent owner American Axle’s motion to stay the mandate pending the filing of a cert. petition. Some circuits are rather generous in granting such relief, but others (including the Federal Circuit) have tended to be more stingy. Friday’s order was no exception.
What makes the order noteworthy is that the Federal Circuit adopted a standard for evaluating these motions, and it did so as a matter of Federal Circuit law rather than looking to regional circuit law. It looked to how the Supreme Court and individual Justices’ in-chambers opinions have examined similar requests for relief. And it concluded that, to stay the mandate, a movant must show: “(1) a reasonable probability that four Justices will consider the issue sufficiently meritorious to grant certiorari; (2) a fair prospect that a majority of the [Supreme] Court will vote to reverse the judgment below; and (3) a likelihood that irreparable harm will result from the denial of a stay.” And in close cases, the Federal Circuit should balance the equities and weigh the relative harms between the parties. Importantly, the Court emphasized the need to show irreparable harm, and that a request to stay the mandate can be (and has been) denied on that basis alone. The Court cited an in-chambers opinion by Chief Justice Roberts refusing to stay a mandate—even after the Supreme Court had granted certiorari—because the patent owner seeking to prevent generic competition had failed to show irreparable harm.
Given that, the Federal Circuit’s focus on irreparable harm in the American Axle order was hardly surprising. One might have thought that American Axle could satisfy the “reasonable probability of cert.” prong of the Court’s test, given that the Federal Circuit itself sharply divided over the issue in denying rehearing and that the Supreme Court has expressed recent interest in 101 issues (discussed here). But for the casual observer, it was difficult to see how the patent owner could show irreparable harm. And that’s where American Axle’s request faltered. It based its assertions of irreparable harm on the expected continuation of potentially expensive district court litigation that might need to be redone if the Supreme Court were to review and reverse the Federal Circuit’s decision. The Federal Circuit noted that mere litigation costs, even if substantial, aren’t irreparable harm. (But as Judge Moore noted in her concurrence, district court judges have discretion to stay or slow down litigation even after a mandate issues. In our experience, some judges will do so, especially where there’s a basis for a credible cert. petition.)
And then for some substance: Judge Moore’s concurring opinion emphasized that American Axle had satisfied the first two prongs of the Court’s test: (1) a reasonable probability that certiorari will be granted and (2) a fair prospect that the Supreme Court will reverse. She explained that the Federal Circuit’s 101 decision is primed for Supreme Court review—no doubt providing American Axle with more good quotes for its upcoming cert. petition. Here are a few: Judge Moore noted that “[t]he Supreme Court often grants certiorari to resolve circuit splits that render the state of the law inconsistent and chaotic. What we have here is worse than a circuit split—it is a court bitterly divided.” (Internal citations omitted.) She stated that, “[a]s the nation’s lone patent court, we are at a loss as to how to uniformly apply § 101.” “There is very little about which all twelve [active judges on the Federal Circuit] are unanimous, especially when it comes to § 101.” Yet she said they were “unanimous” in their “unprecedented plea for guidance.” And she emphasized that American Axle differs from some of the Supreme Court’s past 101 cases, involving business methods or diagnostics. The claims here “are directed to a process for manufacturing car parts—the type of process which has been eligible since the invention of the car itself.”
With that, we’re sure there’s more to come—regardless of what the Supreme Court does with any cert. petition here. Under the Supreme Court’s current COVID-19 deadline extensions, American Axle has 150 days from the July 31, 2020 rehearing denial to seek cert.